BENEFITS EXPERT: Is my wife paid too much pension?

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My wife has just become a pensioner and draws State Pension four-weekly of £539.76. She feels the 25 years she worked would not have been enough to earn her a pension of as much as this. Please put her mind at rest. Is she getting too much?

Concerned husband (by email).

I cannot say for sure but I doubt it. I hope she finds the following information helpful.

A person’s State Pension is usually made up of three parts: the basic State Pension, Graduated Retirement Benefit and State Second Pension.

The award notice that is sent to pensioners every spring gives a breakdown of how the pension is made up.

The basic State Pension depends upon the pensioner’s years of National Insurance.

Under current rules a person needs 30 of these years to qualify for the full basic pension of £115.95 a week.

They will be due a smaller basic pension if they have less than this.

Even one qualifying year currently earns you a small pension.

Graduated Retirement Benefit is based upon the Graduated Contributions that a working person paid during the years 1961 to 1975. This rarely comes to more than a few pounds.

State Second Pension (previously called State Earnings Related Pension or SERPS) is based upon the earnings-related National Insurance Contributions people in work paid from 1978.

This may be reduced if the person had a works pension and was ‘contracted out’ of the state additional pension schemes.

Your wife’s State Pension is £539.76 four weekly or £134.94 a week.

As this is more than £115.95 her pension must include some State Second Pension or SERPS.

These parts of the pension are based on individual earnings and circumstances over many years, so it is impossible for me to estimate if they are accurate without knowing a lot more detail. As regards the basic State Pension, your wife might have less than 30 qualifying years.

In this case it would be less than £115.95 and made up to £134.94 by other parts of the State Pension.

Her annual award notice will tell her what rate of basic State Pension is included in her total pension. Alternatively she might have more qualifying years than she thinks, perhaps as many as 30.

This is because it is not just years of work that help someone build up an entitlement to a basic State Pension.

Account is also taken of periods when the person was awarded National Insurance Credits.

These may include periods of sickness or unemployment, years when the person was aged 16-19, or years when they were bringing up children and away from the workplace.